Since Dan Walker strolled the governor’s mansion in Illinois, the Teacher Retirement has been raided by the corruption that is known as “government” in Illinois. Educators in the state of Illinois pay for 75% of their own retirement, contrary to popular belief. Yet the 25% the state owes has not been paid to the TRS since Jim Edgar’s governance 1991-99. And now the newest governor, Pat Quinn, has proposed a $2.5 billion reduction in state funding to the five state pension systems for the fiscal year that begins July 1, including a $1.3 billion cut to the Teachers’ Retirement System of the State of Illinois (TRS).
Further, this budget blueprint calls for the state to suspend its payments to the pension systems as of March 31, 2009, eliminating $362 million due to TRS in the current fiscal year. The proposed cuts would exacerbate the state’s $73 billion pension debt, of which $41 billion is the Teachers’ Retirement System’s share. The plan perpetuates the broken funding promises that occurred most recently in fiscal years 2006 and 2007 when the state deviated from its statutory funding obligation and cut $2.3 billion in funding to the retirement systems.
From Jon Bauman, Executive Director of TRS, “These amounts must be repaid to the retirement systems with interest. If $1.3 billion is cut from
TRS during fiscal year 2010, it will cost the state $5.8 billion over the 35 years remaining in the statutory funding plan.” “The funding reductions hit particularly hard because of the systems’ recent investment losses caused by extreme volatility in the global financial markets.”
The state’s pension debt is mainly a product of insufficient state funding over a period of three decades and not due to overly generous benefits. The average retirement benefit paid by TRS totals $41,500 a year. Public school teachers in Illinois do not receive Social Security, often
making their TRS benefit their only source of retirement income.
The Governor’s budget plan also calls for current active members of TRS to pay an additional two percent of their pay toward retirement, a provision that is considered an impairment of benefits and prohibited under the Illinois and U.S. Constitutions. TRS members currently
contribute 9.4 percent of their income, which is already among the highest contribution rates in the nation among teacher pension plans.
TRS is urging the Illinois General Assembly to comply with current state law requiring actuarial funding amounts designed to pay off most of the state’s pension debt by fiscal year 2045.
TRS provides retirement, disability and survivor benefits to 355,584 teachers, administrators and Illinois public school personnel employed outside the city of Chicago. The market value of the System’s assets stood at $29 billion as of December 31, 2008.
Kyle McCarter, senator of the 51st district in Illinois, likens Quinn’s budget to that of infamous Blagojevich saying it continues Blago’s legacy in our corrupt state.
As I look toward my own retirement, I do so with much trepidation. Threats of redutions, extensions and further payments from the ones I have made over the entire length of my career fill me with anger and fear. With all of the irresponsible and derelict actions in our country by a reckless and negligent Democrat government, the hope that Blago’s exit and Quinn’s entrance once wraught seems like much more of the same.